Three Line Strike Pattern – Bearish

Bearish Three Line Strike is a four-candle bearish trend reversal candlestick pattern.

Imagine there is a series of three bullish candlesticks in a row. It shows a strong uptrend and a bullish scenario. In the fourth candle, price opens within the body of its previous bullish candle and closes below the opening price of first bullish candle in the series of three bullish candles. It turns out to be a strong bearish candle that gives up on all the gains of three candles in a single session. This formation is known as a Bearish Three Line Strike pattern.

It is a strong bearish trend reversal pattern. The bears gain tremendous strength in a single session and the bulls are in shock. As the name suggests, it’s a solid strike by bears.

The price trend has turned bearish unless it moves above the high of the fourth (bearish) candle of the pattern. The price falling below the low of the fourth candle in the subsequent sessions would be a bearish pattern breakout. But the consolidation or the correction after forming this pattern that protects the top of the fourth candle would be bearish pullback trade opportunity.

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This pattern can be plotted on the chart by adding it from the Add study menu in TradePoint & Patterns in RZone. The pattern is also available in the System Builder section. By combining this pattern with other patterns and indicators, you can create your own trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.